Brown (L.A.) Ltd. Estate, Re, (1971) 4 N.B.R.(2d) 880 (SCC)

JudgeRitchie, Hall, Spence, Pigeon and Laskin, JJ.
CourtSupreme Court of Canada
Case DateSeptember 04, 1969
JurisdictionCanada (Federal)
Citations(1971), 4 N.B.R.(2d) 880 (SCC)

Brown Ltd. Estate, Re (1971), 4 N.B.R.(2d) 880 (SCC);

    4 R.N.-B.(2e) 880

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Sommaire et texte intégral

Re Estate of L.A. Brown Ltd.

Indexed As: Brown (L.A.) Ltd. Estate, Re

Répertorié: Brown (L.A.) Ltd. Estate, Re

Supreme Court of Canada

Ritchie, Hall, Spence, Pigeon and Laskin, JJ.

March 8, 1971.

Summary:

Résumé:

The Supreme Court of Canada allowed the appeal in part and held that a trustee for a bankrupt company was entitled to a judgment for $20,834.00 against a former managing director of the company. The director was held liable to account to the company for certain assets transferred to the director by the company just prior to the bankruptcy of the company.

The Supreme Court of Canada reversed a finding of the New Brunswick Court of Appeal with respect to a claim by the managing director for a credit of $6,900.00. The director claimed that the $6,900.00 was due to him as compensation for his services as a contractor in constructing a service station on the land of the company. The land used for the service station was sold by the director to the company at a profit of $6,900.00. The Supreme Court of Canada held that in the circumstances the director was justified in claiming $6,900.00 compensation for his services as contractor; and that there was no injustice in fixing the amount of such compensation at $6,900.00.

The Supreme Court of Canada reversed the finding of the New Brunswick Court of Appeal that the managing director was entitled to a credit of $10,000 for a debt due from the company to the managing director. The Supreme Court of Canada held that the evidence presented to support the debt was unsatisfactory. The Supreme Court of Canada referred to the company minute book and stated that the company minute book standing alone could not support the director's claim for the debt of $10,000.00.

Bankruptcy - Topic 6744

Practice - Jurisdiction - To determine status of a trustee - The Supreme Court of Canada held that the status of a trustee in bankruptcy must be determined in a proceeding in bankruptcy pursuant to s. 140 of the Bankruptcy Act - Paragraphs 19 to 22.

Practice - Topic 9030

Appeals - Evidence on appeal - General - Motion to adduce further evidence in Supreme Court of Canada - Duty of a trustee in bankruptcy to produce for the court all relevant evidence - Motion granted - Paragraph 27.

Company Law - Topic 4348

Directors - Transactions between director and company - Claim by director against company, proof - Character of evidence necessary to support claim by a director against a company for a $10,000.00 debt and a claim for $6,900.00 for services rendered by the director in acting as contractor for the erection of building for the company - The Supreme Court of Canada allowed the claim for $6,900.00 for services rendered - The Supreme Court of Canada disallowed claim for $10,000.00 debt due to weight of evidence and unsatisfactory minute book of meetings of directors - Paragraphs 37 to 41.

Cases Noticed:

Re Lincoln Motors Co. (1922), 2 C.B.R. 480, folld.

Lemieux v. McCauley (1938), 21 C.B.R. 127; 42 Que. P.R. 284, folld.

Re Branson, Ex p. Trustee, [1914] 2 K.B. 701, folld.

Re H.O. Kirkham & Co. Ltd., [1939] 1 W.W.R. 796; 20 C.B.R. 223; [1939] 1 W.W.R. 425, folld.

Re Soucier, [1939] 4 D.L.R. 777n; 20 C.B.R. 298, folld.

Dormuth et al. v. Untereiner et al., 43 D.L.R.(2d) 135; [1964] S.C.R. 122; 46 W.W.R. 20, folld.

Statutes Noticed:

Bankruptcy Act, R.S.C. 1952, c. 14, sect. 6(7), sect. 21(9), sect. 68(5), sect. 140.

Supreme Court Act, R.S.C. 1952, c. 259, sect. 67.

Counsel:

J.D. Harper, for appellant;

D.M. Gillis, Q.C., for respondent.

Appeal from a judgment of the New Brunswick Court of Appeal, September 4, 1969, 1 N.B.R.(2d) 836, arising out of a claim by a trustee in bankruptcy to set aside a transfer of certain assets by a company to a director.

The judgment of the court was delivered by Spence, J.

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